MOSCOW in February, with its freezing winds and short grim days, is just about the worst possible choice for a conference venue; but the finance ministers from the Group of Eight (G8) richest nations who must gather there next weekend have only themselves to blame. Eight years ago, when it still seemed possible that it would become a liberal democracy, Russia was invited to join Great Britain, France, Italy, Canada, Germany, Japan and the United States in what was then the G7; it is now Russia’s turn to take the G8’s rotating presidency, hence next week’s meeting. Darkness by 4pm and minus 20 degrees will be only the half of it: worse will be the ignominy of having the world’s greatest and richest democracies chaired by Vladimir Putin, the ex-KGB agent turned Russian president who is fast becoming the antithesis of the liberal values the G8 is supposed to represent.
At home, President Putin has rolled back political freedom by throwing rivals in jail, neutering the media and installing a cadre of ex-KGB agents in all the important jobs. Abroad, he is marshalling Russia’s vast oil wealth in a bid to recreate a latter-day Soviet Union: he has bullied client states; triggered a new but barley discussed regional arms race reminiscent of the darkest days of the 1970s and 1980s; boasted that his new nuclear missiles can penetrate America’s defences; and done arms deals with rogue states such as Iran. Tellingly, Mr Putin recently called the collapse of the Soviet Union “the greatest geopolitical catastrophe of the century†and said, “there is no such thing as a former KGB man†– in other words, once a KGB man, always a KGB man. As usual, deluded Westerners, including many investors, have dismissed these comments as no more than the rhetorical flourish of a populist politician; the truth is that Mr Putin means every word he says, as he has demonstrated time and again through his actions.
At last count, the siloviki – current or former members of the Russian security services *– controlled 33% of government jobs and 58% of top leadership positions under Mr Putin. Many Russia watchers now agree that the FSB (successor to the KGB) and the siloviki are merely the latest incarnation of an intelligence elite that calls itself Russia’s Higher Police and has existed at the heart of the Russian state for the past 200 years, originating in 1825 and established to crack down on dissent and gather intelligence and research on the true state of the country. The Higher Police managed the transition from the Tsars to communism to capitalism, reinventing itself in the process; but its membership of elite social engineers maintained a self-consciously distinct identity and a belief in a mission that puts national greatness above all else.
The Higher Police and the siloviki were temporarily sidelined during the great privatisations of the 1990s and the introduction of democracy, free speech and a more open society; it this extraordinarily unusual period in recent Russia history they are now trying to overturn. The reforms created independent centres of power, including the media, the oligarchs, regional governors and, of course, the break up the Soviet Union and the old Russian zone of influence. All of these positive changes are now in the process of being crushed or neutered under Mr Putin, in a brilliantly thought-through and sequenced strategy to crush his opponents.
Russia’s regional governors are now effectively appointed by the Kremlin, which also controls the news on the three biggest television networks. Last month’s row over the links between British spies and non-governmental organisations operating in Russia is an early move to crack down on the institutions of civil society. The arrest of the former owner of Yukos, Mikhail Khodorkovsky, who will be spending the next few years in a Siberian labour camp, signaled the end of the oligarchs’ pretensions of power and was a symbolic punishment for a man who dared to defy the will of the Higher Police. The manner in which he was arrested and his property confiscated was no different from that of 19th century Tsarism and 20th century Bolshevism.
The destruction of Yukos showed that the siloviki have won the argument that the state should lead the development of the country’s oil, gas and mineral resources. The Russian government also recently seized control of Avtovaz, the country’s largest car maker and owner of Lada; in a radical extension of state control, it is committed to buying a controlling stake in the biggest company in those sectors which the government deems “strategicâ€: defence, electricity, gas, metals/minerals, oil, and aviation. This is an astonishing reversal of policy: Russia may still have a flat tax and a relatively stable macroeconomic framework – the latter being essential to attract foreign capital – but it is forging a unique form of Russian state capitalism, where private property rights can always be revoked and where the real power will always lie with the Kremlin.
Russia commands 28% of world gas reserves, more than any country in the world; the plan is to leverage this as a tool for economic warfare to re-establish a zone of Russian influence. Grabbing control of energy companies or distributors in neighbouring countries and building a new network of pipelines to provide them with energy to ensure they become dependent on Russian supplies is the name of the game. In Belarus, Gazprom has bought the gas mains. In Moldova, it controls 50% of the gas mains. In Bulgaria, Gazprombank has a stake in two key bidders for the Belene nuclear power plant tender. Gazprom is also looking at the Bulgarian gas transmission network used to pump Russian natural gas to other countries; it is even rumoured to be considering a bid for Centrica, the British gas company.
Russia’s biggest coup to date is its 2004 deal to supply Western Europe; a 1,200km Baltic Sea pipeline, owned 51% by Gazprom, will carry Russian gas directly into Western Europe. It could allow Central Europe and the Baltic states to be cut off while deliveries are still maintained to Germany; scandalously, no sooner had former German Chancellor Gerhard Schröder, who agreed to the controversial project, been removed from office than he joined Mr Putin’s payroll to work on the project.
That this strategy works all too well was demonstrated by the way Ukraine has been treated by Russia. A new Ukraine looked to the future – then came winter and Mr Putin turned off the heating. Gazprom stopped supplies when Ukraine refused to accept a five-fold increase in gas prices (Mr Putin had already taken the precaution of buying up Turkmenistan’s supplies to ensure Kiev had no alternative). There is now every chance that the Ukrainian elections next month will reverse its “Orange Revolution†when the pro-Moscow Viktor Yanukovych was thrown out after being forced to re-run rigged elections. The explosion last month of the Mazdok-Tbilisi gas pipeline, which supplies gas to Armenia and Georgia, was widely seen as another warning shot from an increasingly aggressive Russia.
It is deeply ironic that Mr Putin has chosen “energy security†as the theme of his chairmanship of the G8: for most of Russia’s neighbours energy security means not having to depend on erratic and calculating Russian suppliers. Like the ayatollahs in Tehran and the communists in Beijing, Mr Putin understands raw power; the trebling of world oil prices and his shameless grab of oil companies has allowed him to bankroll a huge military expansion.
Last week, Mr Putin was boasting about his brand new nuclear missile, which can zigzag in space, thereby foiling America’s missile defence system. The Topol M (SS-X-27) is the most advanced and deadliest nuclear missile ever developed; it can be launched from a submarine or a road and would have 75 times the impact of the Hiroshima bomb. To the surprise and alarm of the White House, the roll-out of the Topol M has been described by Russian officials and their state-controlled media in blatantly anti-American terms. Welcome to the new Cold War between Russia’s offensive capacity and the defensive ability of America.
In 2004, Russia conducted 15 ballistic missile test launches, more than in any year since the Soviet era; in 2005, close to 30 tests were carried out. Three months ago, the Russian forces pulled off a technological coup when they fired a Topol M equivalent from a submarine in the White Sea. It hit its target, on the other side of Russia, within 30 minutes. Had it been aimed in the other direction, it could have destroyed New York.
While obsolete Soviet-era nuclear technology is being dumped with great fanfare to confuse naïve Western observers, Mr Putin is using his new oil wealth to start the mass production of a missile designed to take off so quickly that no early warning system can detect it – and no American missile defence shield can destroy it.
Armed with this new technology, Mr Putin seems determined to side with dictators against Western democracies. Recovered documents from Baghdad show he was selling arms to Saddam Hussein just months before the Iraq invasion. Mr Putin is now cultivating Iran: while even the usually spineless European Union is being forced to condemn Tehran’s disgusting anti-semitism, Russia has been flogging the regime its most sophisticated anti-aircraft guns, which would be deployed against any Western strike on Iran’s nuclear technology. As in the first Cold War, Russia is out to support every enemy of America, regardless of the consequences (even helping an Islamic dictatorship to go nuclear, which should be self-evidently idiotic for a country that has its own problems in Chechnya).
As in centuries gone by, international relations and geopolitical shifts in the 21st century are being determined by raw power, both over natural resources and military technology. Europe’s pacifism, waning economic influence and ill-defined, quasi mystical belief in soft power and “international law†is no match for these forces. America’s general attention deficit, continuing failure to understand the true nature of the geopolitical risks facing the world and debacle in Iraq means that Washington is proving equally useless to contain Russia.
For all its recently acquired outward appearance of Western-style normality, Russia has now decisively moved away from liberal democracy and capitalism. After playing a key part in ensuring Russia’s accession to the G8, Andrei Illarionov, who recently quit as Mr Putin’s top economic adviser in disgust at the way the country was going, now argues that Russia should be thrown out of the group. He is right, though this would be no more than a meaningless slap on the wrist for Mr Putin. But instead of a proper response at next weekend’s G8 meeting, there will be only more diplomatic drivel about cooperation, friendship and good intentions. No wonder that dictatorships from Hamas to Iran are thumbing their noses at the West; and that Islamic extremists feel they can display with impunity banners warning of a new 9/11.
The New Cold War - Russia Is Out To Support Every Enemy Of America
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